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The Shelf-Life of Incumbent Workers during Accelerating Technological Change: Evidence from a Training Regulation Reform
with Jens Mohrenweiser (Bournemouth University)
We investigate how incumbent workers’ careers respond to the increasing competition of graduates with more technologically advanced IT skills during a period of accelerating technological change. We identify a supply shock of more technologically advanced IT-skilled graduates by exploiting a reform of a apprenticeship training curriculum, a reform mandating all new apprentices in a large manufacturing occupation to acquire in-depth IT skills. The results show that incumbents experienced long-lasting earnings losses in the form of lower wage growth after the IT-skilled graduates entered the labor market. Incumbents experienced wage losses because they forwent promotions and technologically advanced IT-skilled graduates crowded them out of their occupation. In contrast, CNC-skilled graduates had relatively more prosperous careers, because they were relatively less likely to switch occupation and firms, and they experienced larger promotion rates over time.
The Effect of Automation Technology on Workers' Training Participation
with Pascal Hess (ROA/IAB) and Ute Leber (IAB) (Revise and Resubmit: Economics of Education Review)
We use detailed survey data to study the influence of automation technology on workers' training participation. We find that workers who are exposed to substitution by automation are 15 percentage points less likely to participate in training than those who are not exposed to it. However, workers who leave occupations that are strongly exposed to automation increase their training participation while those who enter them train constantly less. The automation training gap is particularly pronounced for medium skilled and male workers, and largely driven by the lack of ICT training and training for soft skills. Moreover, workers in exposed occupation receive less financial and non-financial training support from their firms, and the training gap is almost entirely related to a gap in firm-financed training courses.
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